Group to Push Missouri to Raise Minimum Wage to $9.45 an Hour

Jeff Mazur, executive director of AFSCME, calls for raises for Missouri's state employees.

Ray Howze /St. Louis Public Radio 

From The Joplin Globe:

By Jordan Larimore

On good days, Tony Hulfeld can get away from work for an hour or two during the afternoon. Even sneaking away usually includes errands related to the job, though. Best-case scenario, Hulfeld said he gets to leave work an hour or so early in the evening.

But most days, Hulfeld, the owner of Fortune East Asian Restaurant, is the one who opens the doors around 9:30 a.m. and locks them up at about 9 p.m. It’s not uncommon for the restaurant’s on-the-clock staff to consist of him and just one other employee.

He said he loves the work but acknowledges he does so much of it himself partly because it saves money. Every hour he works is an hour he doesn't have to pay someone, an hour of reduced payroll. Such is often the life of a small business owner, particularly when first starting out. Fortune East, 1515 W. 10th St., is Joplin’s oldest Asian restaurant, but Hulfeld took the reins just this summer.

The restaurant has seven employees, all of whom work part time, about 20 hours per week. Six of the seven are between the ages of 17 and 19, working for spending money while going to school, Hulfeld said.

As a business owner, Hulfeld acknowledges an increase in Missouri's minimum wage would have an effect on his bottom line and may even result in a reduction of available hours for his employees, perhaps making more work for him.

But the perspective of business owner isn't the only one he brings to debates about minimum wage.

“Having worked in restaurants since I was 14, I know what it's like to not make much,” he said. “It's one of those things: When I took over, I wanted to make sure they were paid what I thought they should be. Now on the other hand, that may not be the best for the bottom line.

“As someone who has worked for minimum wage — tried to pay bills on that — I can definitely see the positive,” of an increase, he said. “As far as from the business owner side, I'm torn as well. I know how hard my employees work. As a small business, I ask a lot of them, and they always step up and deserve to be paid well for it. On the other side, as a business owner, you always have to look at the bottom line.”

Hulfeld is an example of arguments made by both sides in ongoing minimum wage debates — the positive impact it might have on some workers and the negative impact it could have on businesses.

Missouri may soon be wading back into that debate.

Give Missourians a Raise — the same group that successfully campaigned for a ballot initiative raising the state's minimum wage from $5.15 to $6.50 per hour in 2006 — is considering multiple minimum wage proposals to try to bring before voters next year, said Lew Prince, the group's treasurer. That effort could include a petition drive.

According to the National Center for Money in State Politics, much of the group's money in 2006 came from the now disbanded Association for Community Organizations for Reform Now and unions, including the National Education Association, the United Food and Commercial Workers and others.

‘Moral imperative’

“It’s sort of a moral imperative, for one, that if people work 40 hours per week, they at least be able to make some kind of minimum ends meet,” Prince said. “That has always been the primary motivation behind raising the minimum wage.”

The current minimum wage in Missouri is $7.65 per hour, but the 2006 measure that was passed also tied the wage to the Consumer Price Index, meaning it is evaluated and adjusted accordingly every year. Missouri's minimum wage did not increase in 2016 but will rise by 5 cents on Jan. 1 to $7.70 per hour.

Most of the proposals being advocated by Give Missourians a Raise would immediately raise the state's minimum hourly wage to $9.45 per hour and phase in more increases to between $12 and $15 per hour from 2017 to 2020, Prince said.

The proposed increase is similar to those recently passed by state legislatures in California and New York, and closer to those approved by voters in Arizona, Colorado, Maine and Washington in last month’s elections. Residents in those four states voted to raise the minimum wage to at least $12 per hour by 2020.

On the heels of those increases, protests were orchestrated recently by minimum-wage earners and increase advocates in Kansas City and St. Louis. In Kansas City, 108 people were arrested for failure to obey a lawful order after a Nov. 30 sit-in.

The federal minimum wage is $7.25 per hour, which the federal Bureau of Labor Statistics says hasn’t kept up with inflation. The Pew Research Center says the federal minimum wage has lost more than 8 percent of its purchasing power to inflation since it was last raised in 2009.

Competitive edge?

The Missouri Chamber of Commerce and Industry is one of the business organizations opposing an increase in the minimum wage, arguing that it puts the state economy at a disadvantage relative to surrounding states when companies consider locating in or expanding to Missouri and that an increase negatively impacts small businesses and therefore low-wage earners.

“Raising the minimum wage, I think, has the unintended consequence of hurting the people it’s trying to help,” said Brian Bunton, general counsel for the state organization “You sort of mortgage that short-term fix on the backs of future generations of people and the opportunities that are afforded to them.”

Bunton said the Missouri Chamber does not keep data on how often companies that choose to locate in Missouri as opposed to neighboring states pay minimum wage.

“I’m not talking about Boeing or a huge company like an enterprise or things like that,” he said. “I’m talking about these midsize companies where paying someone or being forced to pay someone three, four, five times more than other states ... it adds up, and it might be the difference between whether or not the company decides to locate in Missouri or expand into Missouri.”

Of the eight states that share a border with Missouri, five — Kansas, Oklahoma, Iowa, Kentucky and Tennessee — have a minimum wage the same as the federal minimum of $7.25 per hour. Arkansas, Illinois and Nebraska all have minimum wages ranging from $8 to $9 per hour.

Some states and communities that have increased the minimum wage have exempted small businesses, usually using the company’s number of employees to decide what qualifies as a small business. Bunton said such an exemption likely wouldn’t change the chamber’s position, citing a belief that forcing even large, profitable corporations such as Wal-Mart and McDonalds to pay their employees more would also lead to job loss and automation.

“When the government injects itself into something, the free market always responds,” Bunton said. “Private business is more nimble and smarter than the government.”

Prince, with Give Missourians a Raise, said he doesn’t believe minimum-wage workers at large corporations are at risk of losing jobs to technology if wages go up because those companies would already have automated if it were feasible.

“These businesses that want to deal with as few employees as possible are going to go to (automation), that has nothing to do with the minimum wage,” he said. “But what it does do is it forces companies — Wal-Mart has some 40,000 employees (in Missouri) — and it forces them to leave that money in our state, to leave $2 more an hour in our state.”

Hobby Lobby philosophy

There is no united front among the business community, however, when it comes to paying minimum wage.

Hobby Lobby, a private company with more than 700 locations in 47 states, including one in Joplin, has a reputation for paying its employees well above minimum wage. A 2014 estimate by Forbes put the company’s annual revenues at $3.3 billion with 23,000 employees.

Donald Pearce, store manager of Joplin's Hobby Lobby, referred questions and interview requests to a corporate spokesperson, who directed the Globe to the company’s website. The site says Hobby Lobby’s full-time employees are paid $15.35 per hour and part-time workers earn $10.35 per hour. Pearce declined to answer questions but confirmed that his employees earn significantly more than minimum wage.

In a statement posted to the company’s website, Hobby Lobby CEO David Green says, “We know that if we reward our employees for their hard work, we will be rewarded in turn with their loyalty and dedication to their job and our customers.”

Pittsburg (Kansas) State University professor of economics Michael Davidsson agreed that a significant increase in the minimum wage could lead to automation but said the impact would be dependent on the level of an increase.

“This has been debated for a long time,” he said. “I am glad that some of the cities like Seattle and L.A., they increased it to $15 per hour, or they’re going to, because that’s going to answer the question finally for once and for all.”

Small business

Opponents of minimum wage increases also contend small businesses can’t afford the increase in payroll costs, saying the added expense could cause some to go under completely.

“Small businesses are going to be impacted more than big businesses because big business usually is very established, but a small business, there’s more fighting for a market share,” Davidsson said.

However, Richard Von Glahn, organizing director with the advocacy group Missouri Jobs with Justice, said the expense that comes with a higher minimum wage is offset by the increase in dollars injected into the economy by an increased minimum wage. Missouri Jobs with Justice is a nonprofit coalition of community and labor groups that supports the proposal by Give Missourians a Raise.

“What they (businesses) need is an actual customer base that has money in their pocket that they can spend,” Von Glahn said. “So when you look at the economic implications of increasing the minimum wage, it’s sort of a multiplier effect: When people have money, they shop in communities and local businesses.”

Prince said he co-owned and operated Vintage Vinyl, a record store in the St. Louis suburb University City before selling his share of the business and retiring recently. He said he and a partner started the business with “four crates of records in a $10-a-week stall” at a farmer’s market in 1981, and like Hulfeld, working tirelessly to get the company off the ground before eventually expanding to having about 24 employees today.

Read more from The Joplin Globe.